ASIO error led to Egyptian terrorism suspect being placed in low-security prison in Adelaide, report finds

Significant communication problems within domestic spy agency ASIO led to an alleged Egyptian terrorist being cleared for community detention, a report has found.

A report from the Inspector General of Intelligence and Security found ASIO cleared Sayed Abdel Latif, despite the fact he was the subject of an Interpol red notice.

The report found ASIO had information that may have seen it reject the application but it was not used because of a lack of communication.

It described a check conducted at the time as extremely limited.

Despite being cleared for community detention, Abdel Latif instead spent 11 months in a low-security centre in the Adelaide Hills before being transferred to the higher-security Villawood Detention Centre in Sydney.

The report also found communication problems within the Immigration Department and between the department, ASIO and the Australian Federal Police.

The agencies have all accepted the report's recommendations.

The Interpol notice on Abdel Latif said he had been convicted of murder and terrorism offences in his home country.

Inspector general Vivienne Thom found Abdel Latif volunteered information when he arrived which closely matched that of a man sought by Interpol since 2001 for belonging to an extremist organisation and for a range of violent offences.

Immigration, the AFP and ASIO all knew of the notice, the report found.

"The details provided should have alerted agencies to the fact that his case presented complex security issues," the report stated.

Potential threat to national security

The report also says the AFP did not pass on information about the original conviction in Egypt, and that while Immigration found the family should be allowed to apply for protection, a brief to that effect was probably "misplaced" in the Minister's office.

Dr Thom notes there were high workloads and demands in the various agencies, which goes some way to explaining the problems.

"The potential for harm to national security that could have been caused by these problems did not materialise," the report stated.

"However, such an outcome is not assured for other complex security cases."

In June, Interpol removed the murder conviction and additional firearm charges from its notice on Abdel Latif.

But he is still listed as having been convicted of belonging to a banned terrorist organisation.

Abdel Latif, who arrived on Christmas Island with his family in May 2012 and remains in Villawood, has denied that he is a member of any extremist organisation.